New rules to note for the new financial year

The new financial year along with it brings new rules too.

As an investor it is your duty to be updated with any new rules since these can and do affect your finances directly or indirectly.

Being updated with new rules if any from time to time helps you better understand if you need to take any action with how you manage your finances and if you do then what should these actions should be.

best mutual funds to invest

How are Debt mutual funds taxed presently?

Debt mutual funds invest in government securities, debentures, corporate bonds, etc. unlike equity mutual funds which invests primarily in equity and equity related instruments.

They provide lower returns than equity mutual funds but more safety.

They are less volatile than equity mutual funds and are more suited for short term goals.




For debt mutual funds, long term capital gains tax is applied on gains from debt mutual funds held for more than 36 months.

The LTCG rate for debt mutual funds is 20% after indexation.



For debt mutual funds, short term capital gains tax is applied on gains from debt mutual funds held for less than 36 months.

Short term capital gains are added to your income and taxed as per your income tax slab.


Additional reading: Click Here to read about the basics of mutual funds

How will debt funds be taxed now?

Presently debt mutual funds held for more than 36 months would attract a LTCG tax of 20%.

The indexation benefit was added to it due to which the cost price would go up which in turn would bring down profit.

Lower profit would mean lower LTCG tax.

This will not be the case for investments made in debt mutual funds from 1st April 2023 onwards.

Going forward there will be no dual benefits of LTCG tax & indexation and instead all gains will be added to your income and will be taxed as per your income tax slab.

This will be applicable for all funds investing less than 35% in domestic stocks, therefore this rule will be applicable to international and gold funds too along with debt funds since they would be treated at par.


Mahila Samman Savings Certificate

This particular scheme is open to investments only for women.

Investments will be accepted into this fund only from 1st April 2023 to 31st March 2025.

The investment tenure will be of two years with partial withdrawals allowed.

The maximum investment amount permitted is of 2 lakhs (only once) with interest rate of 7.5 % annually.


Senior Citizens Savings Scheme

This is a government backed scheme.

As the name itself mentions, this scheme is only available for senior citizens.

The deposit limit (one time investment) has been raised from Rs 15 lakhs to Rs 30 lakhs.

The interest is paid on a quarterly basis.


New Income Tax Regime

Under the new tax regime, income up to 7 lakhs will be tax free.

The old tax regime will continue as it is.

A standard deduction of 50,000 has been granted and extended to the new tax regime as well.

New Income Tax Regime


Tax Rate

3 to 6 lakhs

5 %

6 to 9 lakhs

10 %

9 to 12 lakhs

15 %

12 to 15 lakhs

20 %

Above 15 lakhs

30 %


Beyond the standard deduction of 50,000, the usual tax exemptions in the form of ELSS mutual funds, HRA, LIC premium cannot be claimed under the new tax regime.

The new tax regime is the default option now meaning you will need to opt for the old structure voluntarily in case you wish to.

Surcharge on annual income above 5 crores has been reduced from 37% to 25%.


Old Income Tax Regime


Tax Rate

0 to 2.5 lakhs


2.5 to 5 lakhs

5 %

5 to 10 lakhs

20 %

10 lakhs and above

30 %


Under the old tax regime, those earning up to 5 lakhs can avail of rebate, meaning no tax.

Those earning beyond 5 lakhs can make use of tax saving instruments like HRA, ELSS mutual funds, etc.

Are you investing in the right mutual funds?

Insurance policies

Income benefits from all policies (except ULIPS) with an aggregate premium of more than rs 5 lakhs will now be taxable.

This has been brought into effect since the underlying belief in the past was that the exemption was misused by individuals.

However in the unfortunate scenario of the policy holder passing away, the proceeds of the policies will be tax free.

The new tax laws will be applicable only for policies issued on or after April 1, 2023.


For portfolio enquiriesemail us with your doubts at

Disclaimer : While due precaution has been undertaken in the preparation of this article, The Mutual Fund Guide or any of its authors will not be held liable for any investments based on the above article. The above article should not be considered financial advice and has been published only for your perusal. Due credit has been given in case wherever required, in case you feel any part violates any rights then do get in touch with us and we shall get it duly removed.  
Mutual Fund investments are subject to market risks. Please read the offer document carefully before investing

Copyright © 2023  The Mutual Fund Guide, All rights reserved

My Instagram